MALWINDER SINGH SANGARI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, AMRITSAR AND ANOTHER

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CWP/30240/2024HC Punjab & HaryanaPHHC01150328202407 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court held that notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and the proceedings initiated thereafter, without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, were contrary to the provisions of the Act. The Court agreed with the view taken by the Coordinate Bench that circulars or instructions by the Board cannot override statutory provisions or make them otiose. Legislative enactments with financial implications must be strictly followed. The authorities cannot usurp legal provisions for their convenience, causing hardship to assessees. Instructions and circulars can only supplement statutory provisions. Consequently, the notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and the order dated 30.03.2023, were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act if so advised. The specific notice dated 16.04.2024 issued by the JAO under Section 148 and all consequential proceedings were also set aside. The ratio is that faceless assessment procedures mandated by statute cannot be circumvented by administrative instructions or by bypassing the prescribed procedure.

What were the facts?

The petitioner, Malwinder Singh Sangari, filed a writ petition challenging notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148 of the Income Tax Act, 1961, and subsequent proceedings. The petitioner argued that these actions were taken without conducting a faceless assessment as mandated by Section 144B of the Act. The revenue contended that the circulars and instructions issued by the Board could be interpreted differently. The High Court noted that the issue was similar to previously decided cases, CWP No. 21509 of 2023 (Jasjit Singh vs. Union of India and others) and CWP No. 1574 of 2024 (Jatinder Singh Bhangu vs. Union of India and others). The court was presented with notices dated 28.02.2023, 16.03.2023, 20.03.2024, and 30.03.2023, and an order dated 30.03.2023, which were challenged.

What were the issues?

1. Whether notices issued by the JAO under Section 148 of the Income Tax Act, 1961, and subsequent proceedings initiated without conducting a faceless assessment as envisaged under Section 144B of the Act, are valid and in accordance with the law? (Question of law and mixed fact and law, turning on Sections 144B and 148 of the Income Tax Act, 1961). Assessee's Contentions: The assessee argued that the notices and proceedings were contrary to the provisions of the Act, specifically Section 144B, which mandates faceless assessments. They relied on the decisions in Jasjit Singh vs. Union of India and others and Jatinder Singh Bhangu vs. Union of India and others, which held that circulars and instructions cannot override statutory provisions. Revenue's Contentions: The revenue suggested that there might be grounds to distinguish the present case from the previously decided ones, implying a different interpretation of the applicable circulars or instructions.

Which sections of the Income-tax Act were involved?

Section 148,Section 144B,Section 119,Section 120

AI-generated summary — verify with the full judgment below

123

Malwinder Si

Assistant Com CORAM: H

Present: M

SANJEEV P 1.

N 2.

M behalf of the r 3.

L issue involved by this Court India and oth CWP No.1574 and others, de under: “ B c IN THE HIGH COURT OF PUN AT CHANDIGA C D ingh Sangari

Vs. mmissioner of Income Tax and a

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Sanjeev Duggal, Advocate fo

*** RAKASH SHARMA, J.(Oral) Notice of motion. Ms. Urvashi Dhugga, Sr. Stand revenue. Learned counsel for the parties d in the present petition stands f in CWP No.21509 of 2023 title hers, decided on 29.07.2024, an 745 of 2024 titled as Jatinder Sin ecided on 19.07.2024. This Cour “16. We are in agreement with th Bench and hold that such circul could not have been issued to ove NJAB AND HARYANA ARH CWP-30240-2024 (O&M) Date of Decision: 07.11.2024

…Petitioner another …Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH or the petitioner. ) ding Counsel, accepts notice on are ad idem that the substantial finally examined and concluded ed as Jasjit Singh vs. Union of nd by the Coordinate Bench in ngh Bhangu vs. Union of India rt in Jasjit Singh (supra) held as he view taken by the Coordinate lar or instructions by the Board erride statutory provisions or to

n l d f n a s e d

RAJESH KUMAR 2024.11.08 12:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[2] CWP-30240-2024 (O&M)`

make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 & 8), the authorities cannot be allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees. It also leaves confusion in the minds of the taxpayers. In the opinion of this Court, instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation. 17. In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the learned counsel for the revenue from what has already been held by the Coordinate Bench. 18. Keeping in view the law laid down by the Coordinate Bench (supra), notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, have been found to be contrary to the provisions of the Act, 1961 and accordingly notices dated 28.02.2023, 16.03.2023, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of jurisdiction. 19. The respondents-revenue would be, however, at liberty to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. RAJESH KUMAR 2024.11.08 12:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

[3] CWP-30240-2024 (O&M)`

20.

All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.”

Keeping in view above, we allow this Writ Petition in the aforesaid terms. The observations and order passed above shall apply mutatis mutandis to the present case. Accordingly, notice issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, dated 16.04.2024 and all consequential proceedings are set aside. 5.

All pending applications also stand disposed of accordingly.

(SANJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH)

JUDGE 07.11.2024 rajesh 1. Whether speaking/reasoned? : Yes/No 2. Whether reportable?

: Yes/No RAJESH KUMAR 2024.11.08 12:29 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

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